Updated September 10, 2020
3 min read
If you're considering purchasing a home in Indiana, you’re on the fast track to making one of the most exciting and important financial decisions of your life. The problem is that while looking for your dream house can feel just as good as taking the chequered flag at the Indy 500, deciding on a financing package tends to feel more like a false start.
Thankfully, you’re not the first to be frustrated by the home loan process. Many Indiana residents have found themselves in the same position and found there’s an easier way: Indiana FHA loans. Keep reading to learn how you can simplify your home financing experience and save money with an FHA loan in Indiana.
Why choose an FHA Loan in Indiana
A low cost of living, unemployment rate, and income tax are just a few of the reasons Indiana is a great place to purchase a home. That said, as of April 2019 the total value of FHA loans in Indiana was $249 million, making it one of the most preferred mortgage choices for Indiana homeowners.
Benefits of using an FHA Loan in IN
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Indiana
While there is a maximum loan limit on Indiana FHA loans, the goal of the program is to ensure that most people can qualify for the loan and purchase a house, regardless of the area they live in. In most of Indiana, the baseline limit of $314,827 applies, but the maximum loan limit varies from location to location. Check the link below to see the full list of Indiana FHA loan limits for 2019 and see how much can be borrowed.
Are You Eligible for an FHA Loan in IN?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30 day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in IN?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.